Daily Market Monitor: Russian Eurobonds saw little change on the day as they continued to track benchmark dynamics. We believe that the same pattern will remain in the coming days

Wednesday saw another day of correction on the rouble bond
market, with prices declining on moderate turnover. However, we
expect the declines to end soon. Firstly, healthy rouble liquidity
remains a supportive factor. Secondly, exchange rate dynamics have
reversed to see the rouble strengthen again. At the same time, these
positive factors are balanced by significant uncertainty in the mid-term.
Meanwhile, the Ministry of Finance placed OFZ 46018 on
Wednesday. The bonds, maturing in 2021 with an amortization
structure, were placed at an average yield of 8.69 at the auction.
But the ministry did not allow enough of a premium to place the whole
issue – only Rub 2 bln of Rub 10 bln were placed. We believe that
sovereign bond placements just to meet budget targets could hurt the
market through benchmark yield increases. However, we see the risk
of such an outcome as insignificant at present.
Russian Eurobonds saw little change on the day as they continued
to track benchmark dynamics. We believe that the same pattern will
remain in the coming days. However, a sovereign spread increase to
196 bps could make Russian bonds more attractive, should positive
sentiment find its way into the UST segment. As for Thursday, the
major news on the benchmark side are U.S. jobless statistics (314k
initial jobless claims are expected) and leading indicators (0.1% being
the consensus).